Huawei feels no big impact from Czech, Polish security fears

PRAGUE (Reuters) – Security concerns in Poland and the Czech Republic over telecoms equipment made by Huawei Technologies have not had a significant business impact despite creating uncertainty, a deputy head of central Europe and the Nordics said.

A warning from the Czech cybersecurity watchdog that Huawei’s technology could pose a security threat and Poland’s arrest of a Chinese Huawei employee and a former Polish security official on spying allegations have put it under pressure.

“It is pretty much business as usual with a little bit more attention to show that we are transparent, open and inclusive and we have nothing to hide,” Radoslaw Kedzia, Huawei’s vice president of central Europe and the Nordics, told Reuters.

There had been no “no significant impact” on business or major strategy shifts in the region since the concerns surfaced in December, Kedzia said, adding that Huawei is contacting governments and customers when security fears arise.

Huawei’s 2018 annual report showed it raised revenue in the Czech Republic to CZK 7.65 billion ($327 million) in 2018 from CZK 6.63 billion in 2017 and increased net profit to CZK 159.4 million from CZK 97.1 million in 2017.

The United States has led a global campaign to convince allies to ban the world’s top telecommunications equipment supplier from next generation 5G mobile networks.

Huawei denies U.S. government allegations that it is able to spy on customers, has violated U.S. sanctions on Iran and stolen American intellectual property.

‘PRAGUE PROPOSALS’

Last week Poland and the United States also urged tougher checks on foreign influence over 5G networks in a joint declaration by U.S. Vice President Michael Pence and Polish Prime Minister Mateusz Morawiecki.

Kedzia said Huawei did not have a problem with this and its reference to the “Prague Proposals” on 5G security formulated by security experts in May, saying it complied fully.

The security issue is crucial because of 5G’s leading role in internet-connected products ranging from self-driving cars and smart cities to augmented reality and artificial intelligence. If underlying technology for 5G connectivity is vulnerable, it could allow hackers to spy on or disrupt them.

Europe — where Austria, Belgium, Czech Republic, France, Germany, Greece, Hungary, Ireland, the Netherlands, Lithuania and Portugal are all preparing to auction 5G licenses this year — has emerged as a key battleground for Huawei’s technology.

Following the Czech cybersecurity warning, the government canceled some tenders that included Huawei, which has since won contracts from other customers including public institutions like Czech Television or the finance ministry.

“There is a level of uncertainty at the moment,” Kedzia said. “The level of uncertainty goes out to our customers as well. Some of them hesitate. Some of them say – you know what, I will help you guys, I will give you more orders.”

“On one hand, we are under pressure and we suffer, on the other hand we are confident (that) we are going to go through it and we will become stronger.”

(Reporting by Michael Kahn and Robert Muller, Editing by Alexander Smith)